- On February 8, Alexandria City Manager James K. Hartmann proposed a $553.4 million General Fund Operating Budget for Fiscal Year (FY) 2012.
- For the first time since FY 2008, Alexandria does not have a budget shortfall; the proposed operating budget includes no tax rate increases, no fee increases, and no new cuts to City services.
- The proposed budget General Fund tax rate will remain at 97.8 cents per $100 of assessed value. The City’s real estate assessments grew by 2.55% and the average homeowner would pay approximately $18 more than last year.
In the proposed budget, total spending increases by 4.1% ($21.7 million) from the FY 2011 approved budget. The operating budget transfer to the Alexandria City Public Schools (ACPS) would also increase by 4.1% ($6.9 million) from last year’s approved budget. The budget for City operations increases 3.2% ($9.9 million).
"The City has emerged from the budget challenges of the past three years in a strong financial position, thanks to solid fiscal management, tough decisions and sacrifice,” said City Manager James K. Hartmann. “The results are a more efficient government, operational improvements, stability and the opportunity for a steady recovery."
Major budget issues for City Council’s consideration include:
- A Transportation Add-On Tax On Commercial Property and Small Business Tax Relief
In order to substantially improve transportation systems and to bolster the City's future economic sustainability, a major new transportation investment program is proposed. This program, which totals approximately $189 million over a 10-year period, would allow the City to begin implementing its high-capacity transit corridor plans, improve traffic efficiency, expand transit services for commuters, and provide improved pedestrian and bicycle routes. These transportation investments are proposed to be funded with a 12.5 cent dedicated add-on tax on non-residential commercial property. Fairfax County and Arlington County have already adopted this transportation tax, as authorized by the General Assembly.
To help offset the fiscal impact of the add-on tax on small businesses, tax relief for 2,250 small businesses is proposed. First, the threshold for paying the business license gross receipts tax would be raised from $100,000 to $350,000. Second, the business license tax rates for businesses with gross receipts between $350,000 and $750,000 would be cut in half. The benefit to businesses of these two tax relief proposals would be $1.625 million per year. Third, a $375,000 investment in destination marketing and meetings attraction would be made which should increase tourism spending in hotels, restaurants and retail businesses by approximately $40 million per year.
- The Capital Improvement Program (CIP)
The CIP proposes $957 million in expenditures over the next 10 years, prioritizing maintenance of existing City and Schools facilities and infrastructure, and funding for the Potomac Yard Metro Station.
- ACPS Capital Improvement Program
The City Manager’s Proposed FY 2012 – 2021 CIP recommends funding for the ACPS capital program at the same level as the Approved FY 2011 – 2020 CIP, totaling $158.1 million over 10 years. The Superintendent’s Proposed CIP included two plan options: a Needs-Based Request totaling $384.3 million over 10 years; and a Resource Constrained request of $372.6 million. The significantly larger spending amount requested by the Superintendent’s plan is not included in the City Manager’s Proposed CIP budget, because it cannot be accommodated within City Council’s guidelines for the FY 2012 budget. The request, which has not yet been approved by the School Board, has potential implications for possible revenue sources or additional service cuts, and will need to be further examined by the public and City Council.
City Council will host eight work sessions to review the proposed budget with City staff. These sessions are open to the public and will be recorded and posted online. The public may submit comments online, or speak at a budget public hearing on Monday, March 7, at 4 p.m. and a tax rate public hearing on Saturday, April 16, at 9:30 a.m. The Operating Budget and Capital Improvement Program are scheduled for adoption by the Alexandria City Council on May 2, 2011. Details about the public meetings, proposed budget, and online comments are located at alexandriava.gov/budget.